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ASTA president blasts new credit card policy in letter to United

June 29, 2009

In a letter to United, ASTA President Chris Russo on Monday asked the airline to immediately rescind its "unjust and commercially unfeasible" policy of preventing some agencies from using United's merchant account when booking flights.

Russo's letter was addressed to David Myrick, United’s vice president sales for the Americas. Myrick authored the letter to affected agencies announcing the new policy, which goes into effect July 20.

ChrisRUSSORusso itemized reasons why the policy is unfair and unfeasible:

• For about two-thirds of agencies with access to merchant accounts, that access is via the ARC travel agent service fee program, which was designed to process service fees and has a $500 limit on transactions.

• United is forcing agents to absorb its cost of doing business when travel agencies are the agents, not the providers of services. "By identifying the agents as the providers of the service on customers’ credit card statements, you are asking agents to absorb the risk of credit card chargebacks related to United’s service performance," Russo wrote.

• United will not save on credit card costs if consumers or their agents use plastic to book at United.com. "This suggests the real purpose of this policy to drive agents away from GDSs to less efficient booking processes so United can avoid GDS fees," he wrote.

• Agents have been given insufficient time to prepare systems and procedures to accommodate such a major change. Front-office, mid-office, back-office and consumer booking tools would have to be reprogrammed to accommodate the changes triggered by the new policy, Russo said.

• Costs to agencies would increase by considerably more than the costs United would avoid, Russo said. For one thing, agents’ ARC bonds would increase to the extent that agency cash sales rise. However, doing cash sales on a significant portion of the business is not feasible these days, Russo said.

• The shifted costs ultimately would be borne by consumers. "History shows that fares will not be reduced to reflect the claimed savings in credit costs," Russo wrote.

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